Estonia's thriving wood pellet industry is pitting environmentalists who warn it increases logging and harms biodiversity against supporters who say it makes good use of wood that would otherwise go to waste.

The subject is particularly sensitive in the tiny Baltic state once ruled by Moscow, whose forests cover more than half the surface area and are very much part of the national identity.

But, at a plant belonging to Europe's biggest wood pellet producer, Estonia's Graanul Invest, the company's head of quality and certification systems defended the industry.

"Wood only comes to us when sawmill or plywood factories reject it," Mihkel Jugaste told AFP over the sounds of machinery turning logs into sawdust and compacting them into pellets.

Wood pellets are a type of biofuel that can be used in special pellet stoves or central heating furnaces for homes.

They are also used on a larger scale.

The former coal-fired power station of Drax in Britain now runs partially on wood pellets, including some from Estonia.

- Logging intensity 'too high' -

Environmentalists say biomass demand in western Europe is causing an intensification of logging in places like Estonia, including in protected areas and using techniques such as clearcutting in which entire areas of forest are destroyed.

They warn that bird species like black grouse and woodlark are under threat from the logging, pointing out that woodland bird numbers have fallen by around a quarter over the past two decades.

Their warnings have been heard in Brussels and the European Commission earlier this year initiated infringement proceedings against Estonia for failing to ensure environmental impact assessments before issuing logging permits in these areas.

"The intensity of Estonian forest management is too high and pellet production within the forestry industry plays an important role," said Siim Kuresoo, forest programme coordinator at the Estonian Fund for Nature.

"The initial idea of allowing wood to be burned as renewable energy was only to lessen the waste of the industry. Now it has grown into a big industry by itself," he said.

Wood and wood product exports make up around 10 percent of Estonia's total and the value rose by 48 percent to 165 million euros ($186 million) for the 12 months until August 2021 compared to August 2020, according to official figures.

Graanul has also reported its revenues rose to 438.9 million euros in 2020 compared to 401.7 million euros in 2019.

Jugaste said his company respects and will continue to abide by any environmental protection regulation but emphasised that sometimes stakeholders disagree on what the rules should be.

"We, as a wood processor, cannot really decide for them," he said.

"As long as experts make a decision about the protection status or the protection territory and that list is given to us, then we can protect it 100 percent," he added.

- 'An unbelievable myth' -

An article in Nature Research in 2020 found that there had been an 85-percent increase in logged areas in Estonia between 2016 and 2018 compared to the period 2004-2015 -- one of the largest expansions in the European Union.

At the same time, thanks to natural reforestation and planting, the overall forested area in Estonia has increased to 2.3 million hectares (5.7 million acres) in 2020 from 2.2 million hectares in 2001.

The issue in Estonia is part of a wider European debate over whether wood pellets can be considered a carbon-neutral energy source as long as there is replanting of trees.

Many argue they cannot because burning wood is as dirty as coal and trees take many years to grow back.

Taavi Ehrpais, a forest owner in northwest Estonia, said only about 10 percent of his timber -- the lowest quality pieces -- would end up in a pellet factory.

Ehrpais, who is also the head of Vardi Metsauhistu, a forest management organisation, said it was "an unbelievable myth" that the wood pellet industry was leading to an increase in logging.

Ehrpais also defended logging laws, saying they were "very strict" and guaranteed biodiversity.

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DRAX GROUP

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